National Westminster Bank (NatWest) has been fined £264.8m by the Southwark Crown Court for violating the UK’s Money Laundering Regulations (MLR) 2007.
The bank was convicted for three MLR offences, where it failed to prevent the laundering of nearly £400m between 2012 and 2016.
The Financial Conduct Authority (FCA) has initially launched a criminal probe against NatWest in March this year, over its no-adherence to MLR 2007.
In October, the bank pleaded guilty at Westminster Magistrates Court that it failed to monitor the accounts of a UK-based incorporated customer.
The fine includes a 33% discount for the bank’s early guilty plea.
The bank intends to fund the fine from its existing provisions, with a small additional provision to be taken in NatWest’s Q4 2021 financial accounts.
NatWest CEO Alison Rose said: “NatWest takes its responsibility to prevent and detect financial crime extremely seriously.
“We deeply regret that we failed to adequately monitor one of our customers between 2012 and 2016 for the purpose of preventing money laundering.
“While today’s hearing brings an end to this case, we will continue to invest significant resources in the ongoing fight against financial crime.”
Southwark Crown Court sentencing judge Mrs Justice Cockerill said: “It must be borne in mind that although in no way complicit in the money laundering which took place, the Bank was functionally vital. Without the Bank, and without the Bank’s failures – the money could not be effectively laundered.”
According to FCA, NatWest failed to adequately monitor the activity of a commercial customer, Fowler Oldfield, a jewellery business based in Bradford.
The customer deposited over £365m with the bank, of which around £264m was in cash.
Despite the suspicions raised by the employees who handle the cash deposits, NatWest’s staff responsible for investigating suspected money laundering did not take the required action.
According to a separate investigation led by West Yorkshire Police, 11 people pleaded guilty to charges relating to the cash deposits and three cash couriers were charged.
The UK watchdog and the bank jointly released an “agreed statement of facts”, under the Attorney General’s Guidelines.
FCA enforcement and market oversight executive director Mark Steward said: “NatWest is responsible for a catalogue of failures in the way it monitored and scrutinised transactions that were self-evidently suspicious.
“Combined with serious systems failures, like the treatment of cash deposits as cheques, these failures created an open door for money laundering.
“Anti-money laundering controls are a vital part of the fight against serious crime, like drug trafficking, and such failures are intolerable ones that let down the whole community, which, in this case, justified the FCA’s first criminal prosecution under the Money Laundering Regulations.”
